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Thursday’s Vital Data: Qualcomm, Inc. (QCOM), International Business Machines Corp. (IBM) and eBay Inc (EBAY)

Options activity provides a look at expectations on QCOM, IBM and EBAY

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U.S. stock futures are headed higher in premarket activity, as Wall Street looks to follow crude oil prices higher … after following them lower yesterday. Oil was last seen up nearly 1% at $50.93 after Saudi Arabia said that OPEC would likely extend the group’s production cuts into the second half of 2017.

Thursday’s Vital Data: Qualcomm, Inc. (QCOM), International Business Machines Corp. (IBM) and eBay Inc (EBAY)Meanwhile, economic data brings weekly jobless claims, the April Philly Fed index and the March reading on leading indicators.

Against this backdrop, futures on the Dow Jones Industrial Average have added 0.21%, S&P 500 futures are up 0.3% and Nasdaq-100 futures are leading the way with a gain of 0.4%.

On the options front, volume held the line on Wednesday, with about 13.7 million calls and 14.7 million puts crossing the tape. Puts were also more active than usual on the CBOE, as the single-session equity put/call volume ratio jumped to 0.70, driving the 10-day moving average to a three-month high.

Turning to Wednesday’s most active options, Qualcomm, Inc. (NASDAQ:QCOM) saw mixed activity ahead of its quarterly earnings report, which topped analyst expectations. International Business Machines Corp. (NYSE:IBM), meanwhile, saw heavy put volume following the company’s 20th straight quarter of declining revenue. Finally, eBay Inc (NASDAQ:EBAY) options traders were also on the fence ahead of last night’s first-quarter results.

Data: Qualcomm, Inc. (QCOM), International Business Machines, Corp. (IBM) and eBay Inc (EBAY)

Qualcomm, Inc. (QCOM)

Qualcomm’s licensing row with Apple Inc. (NASDAQ:AAPL) cast a shadow over what otherwise were solid quarterly results. For the quarter, Qualcomm said adjusted earnings were $1.34 per share on sales of $6 billion, besting Wall Street’s expectations for $1.19 per share on revenue of $5.86 billion.

However, for the second quarter, Qualcomm lowered its projections from a range of $1.15 to $1.25 per share to 67 cents to 92 cents per share due to uncertainty surrounding its legal battle with Apple.

Options traders were already betting on uncertainty, as puts made up 56% of the more than 355,000 contracts traded on QCOM stock yesterday. What’s more, that trepidation has carried over into the May options series, where the put/call open interest ratio has ballooned to a reading of 1.35, with puts easily outnumbering calls among soon-to-be front-month options.

Furthermore, peak May put OI totals more than 30,000 contracts at the just out-of-the-money $52.50 strike, hinting that options traders are looking for further downside for QCOM stock — possibly as a result of its legal troubles with Apple.

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